Getting Started

Getting your customers to talk to you doesn’t require trendy, hi-tech stuff. One of our clients with a strong commitment to dialog has a firm policy: always ask one question in any customer communication. The company doesn’t use complicated surveys. It asks simple questions, but does so on every account statement, every catalog, and even some sale notices. Surprisingly, they get more than a 20 percent response rate. When customers share their interests on returned postcards, on the phone, or via e-mail, the company learns a lot about what individual customers want and they deliver CMR.

Retail

Saks, Inc. entices its most valuable customers by offering a 10 percent discount on the next purchase for answers to a few simple questions. Their involvement allows customers to tell Saks, Inc. how they want the relationship to grow.

When Sears developed The Great Indoors (TGI), their highly successful new chain of stores, they started by having conversations with their female customers to understand exactly what frustrates them about shopping for home d cor. They didn’t ask what the customer wanted. They asked what frustrates her.

They learned the average customer spends twenty-five hours a week for eight weeks, visiting sixteen stores and making purchases in 3.8 of those stores in the process of redecorating a room. From dialog with customers, TGI also learned that customers didn’t talk about faucets and tile and towels. They talked about rooms. From that simple feedback TGI planners merchandised the stores by rooms. There is no towel department or hardware department; there is a bathroom department that includes bath furniture, bath hardware, bath and accent rugs, shower curtains, spa products, and towels.

CEO Bob Rodgers credits the success of the stores to these conversations with customers. And to be sure the dialog continues, store buyers are required to spend 25 percent of their time on the floor listening to customers.

Banking

The Woolrich, a bank in the United Kingdom, engages customers in dialog to learn the savings objectives of its customers. The bank then allows each customer to set up as many as fifteen separate savings accounts they call “jam jars” so customers can save for different needs while getting an interest rate based on the combined balance. Each “jam jar” is christened by the customer and this name is then used in every communication, including ATM transactions. By letting its customers manage the relationship, The Woolrich has become known as “the bank with the memory.”

Finland’s largest bank, MeritaNordbanken, has established online open pages geared to building up life-event combinations rather than offering straight deposits, loans, and payment products. They approach CMR from a person’s life events: going abroad, retirement, or the need to move. Merita has 600,000 Finnish e-banking customers, 500,000 of whom use the service on a monthly basis (representing 42 percent of its retail customer base in Finland). By getting customers to tell them about their activities and plans, the bank is able to begin the kind of dialog that creates customer knowledge.

Healthcare/Pharmaceutical

Pharmaceutical companies are now spending significant advertising dollars to tell consumers the benefits of their prescription drugs. But studies show that less than one-third of 1 percent of health information seekers exposed to these ads ever get on the prescription-compliance track. A patient on average persists in taking an antidepressant for only 3.5 months. For an oral diabetes drug, it is only 5.6 months. Among a group of patients taking a drug for a chronic condition, only 16 percent are still on the medication after a year.^[2] Industry sources believe this is because without actually interacting with these customers, pharmaceutical companies can’t build the learning relationships necessary for repeat purchases and long-term revenue growth. This is not a healthy prognosis for either the patients or the industry.

RealAge, an online, permission-based health-marketing intermediary, has a solution. They use interactive communication to point their 3.4 million members toward healthy living choices. The company’s objective is to help pharmaceutical companies build dialog with end-users. RealAge conducted a six-week test with 400 members whose profiles indicated a high cholesterol risk compared with general health-oriented communications, and their compliance to a control group whose members were not exposed to the dialog. The members of the dialog group filled their prescriptions and took the medication as prescribed in five times greater number than the control group. Rich Benci, president of RealAge, says, “This is proof that an ongoing dialog about a specific topic to a specified group of people is much more valuable than hitting different groups of people one message at a time.”^[3]

RealAge asked customers what they knew about their condition, their feelings about specific drugs, and their relationship with their doctors. They created a dialog to gain enough information to let the customer manage the relationship by having their specific questions answered. If this can be accomplished for companies that have always had to wade through numerous intermediaries in order to reach the end-user of their product, think what dialog with your direct customers can do for you.

^[2]Kris Oser, “CRM Best Medicine for Prescription Drug Sector,” DIRECT Newsline, March 21, 2002, p. 1.

^[3]Don Peppers, “A Prescription for CRM Pharma Karma,” INSIDE 1to1, January 12, 2002, pp. 2–3.